Bill “On Digital Assets” Filed in the Duma, Disagreements Resolved

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March 20, 2018

The draft-law “On digital financial assets” aimed at regulating crypto-related matters in Russia has been officially filed in the State Duma on Tuesday. Disagreements between the Central Bank and the Ministry of Finance have been resolved, according to Deputy Finance Minister Alexei Moiseev. The CBR will have the final say in regards to the circulation of cryptos in the Russian Federation.

The Law Regulates ICOs and Crypto Mining

The bill expected to regulate cryptocurrencies, initial coin offerings and crypto mining, has been introduced in the lower house of Russia’s parliament. The official website of the State Duma shows draft №419059-7 has been filed on Tuesday, March 20. The news comes right after Russians gave Vladimir Putin his fourth term in the Kremlin on Sunday. Preliminary results show the President has received more than 76% of the vote.

The draft law “On digital financial assets” defines the legality of “the most widely spread financial assets, currently created and/or issued using digital financial technologies”, according to the explanatory note. It clearly states that the bill covers the implementation of “distributed ledger of digital transactions”. The new legislation also creates “conditions for attracting investments by Russian legal entities and individual entrepreneurs through issuing tokens”. Tokens are described as a “type of digital financial asset”.

The bill also sets the legal basis for conducting ICOs. It establishes the sequence of actions to follow a strict procedure for issuing tokens, RNS reports. The draft states that the release of tokens should be carried out through a public offer. If deputies adopt it in its current version, private individuals and legal entities conducting token sales will be required to disclose specified information about their ICOs.

The authors have included a clause to protect what they call “unqualified investors”. The Central Bank of Russia will have the authority to limit the amount of tokens such individuals can acquire. Initial reports suggested these investments would be capped at 50,000 Russian rubles (~$850 USD). A working group at the Ministry of Economic Development has proposed a 10-fold increase of the limit to 500,000 rubles ($8,500).

Bill 419059-7 gives legal definition to cryptocurrency mining. It has been referred to as a “business activity aimed at creating cryptocurrency and/or validation [of crypto transactions] in order to receive a fee in the form of cryptocurrency”. Other crypto-related terms, like smart contracts, have also been described in the draft.

The Central Bank to Decide the Fate of Bitcoin in Russia

A day before the Law “On digital financial assets” was introduced in the Duma, news came out that a major hurdle in the institutional debate on cryptocurrencies had been overcome. Disagreements between the Central Bank of Russia and the Ministry of Finance have been resolved, Deputy Finance Minister Alexei Moiseev confirmed. It has been decided that the CBR will now determine the fate of cryptos, like bitcoin, including their circulation and exchange in the Russian Federation.

Minfin and Centrobank have argued about several issues related to the regulation of the crypto sector, including the idea of issuing a so-called “cryptoruble”. The main discord, however, was centered on the legalization of cryptocurrency exchange services in the Russian Federation. The bank has only voiced support for trading tokens with rubles and foreign currencies, but has opposed the ministry’s proposal to allow trade of cryptocurrencies on registered Russian exchanges.

The disagreements between the Ministry of Finance and the Central Bank have been “withdrawn”. The decision [about the exchange of cryptocurrencies] will be made by the Bank of Russia, Moiseev told journalists on Monday, quoted by RIA Novosti. The new Law “On digital financial assets” was prepared mostly by his department. The CBR has expressed concerns that cryptocurrency trade would open the door to legalizing dubious transactions.

Do you expect Russia’s parliament to quickly adopt the new crypto legislation? Share your thoughts in the comments section below.